House of Fraser has informed customers that it has cancelled all online orders due to “significant delays” caused by a dispute over payments with its distribution centre XPO Logistics.

Under the pre-pack administration deal which Sports Direct’s Mike Ashley did this time last week, existing pension liabilities and creditor claims can be discarded, according to administrators EY.

The department store’s concessionaires and suppliers are collectively owed at least £70 million in payments due this week relating to sales in June and July, while XPO could currently be owed several million pounds.

House of Fraser has contacted shoppers to say they will be cancelling and refunding “all orders that have not already been sent to customers”, following the retailer’s website being taken down earlier this week.

“We didn’t take this decision lightly, but since we cannot give our customers clear assurances of when their orders will be delivered, we believe cancellation is the best option,” read a statement.

On Wednesday it was reported that employees at House of Fraser’s distribution centre in Wellingborough have been ordered to stop accepting goods and processing deliveries by the site operator XPO Logistics due to a dispute over delivery payment terms.

The department store chain warned customers on Twitter that due to the recent change in ownership, some orders have been delayed. “We don’t currently have a timescale for delivery. However, your order will be delivered as soon as possible.”

At time of writing, the House of Fraser is still down, as many stores are suffering from product shortages. A message on its homepage read: “We’re currently working hard to make some improvements to the website. Don’t worry, we will be back up and running as soon as possible.”

In a separate statement, the new owner said that since the acquisition, the group has started meeting with various House of Fraser suppliers and concessions. “Sports Direct is committed to creating stability as soon as possible, and building exciting plans for the future.”

Last Friday morning, House of Fraser announced its administration, before Sports Direct boss Mike Ashley came in with a £90 million rescue deal, promising to save the majority of stores and staff.

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